In Today’s Changing Economy, Where Will You Put Your Money?
Most foreigners crossing into Costa Rica find a laid back way of life as well as breathtaking beaches and incomparable natural wildlife not to mention beautiful homes and vacation properties. However, visitors and ex U.S. Patriots alike are surprised to find that Costa Rica’s banks can be strikingly different from what a majority of them have grown so comfortably accustomed to in their home countries.
It was during Christopher Columbus’ fourth and final voyage to “The New World” that he accidentally discovered Costa Rica on September 18, 1502. It was while anchoring offshore that he first encountered a small crowd of the local Carib Indians that still inhabit parts of the Caribbean Coast today. The locals paddled out in canoes and greeted Columbus and his crew, who were awe-struck at the sight of their golden jewelry. It was due to the apparent abundance of gold that Gil Gonzalez Davila of Spain named the country Costa Rica, which translates into Rich Coast. Columbus and his Conquistador crew failed to strike gold as originally planned and the Colon (Columbus in Spanish) is used as today’s current currency.
Colones come in bills of 1,000 2,000 5,000 and 10,000 Colones while the coins come in increments of 5, 10, 20, 25, 50, 100, 500 all featuring a picture of Columbus’ famous ship that discovered the tropical oasis more than 500 years ago. Although the exchange rate between the dollar and the colon changes daily, it is currently set at 546 colones to each dollar. Luckily most banks offer clients both checking and savings accounts in Dollars or Colones. It is simply a matter of deciding which currency will meet your banking needs.
Generally, accounts in Colones tend to have much higher interest rates than accounts in dollars; however, there is a monthly devaluation of the colon to the dollar. This means that you may not be earning as much as you expect if you are paying for things in dollars. As the currency exchange rate fluctuates daily, people banking in Costa Rica often find themselves watching the exchange rate carefully in order to calculate the best time to buy or sell colones or dollars.
In the past, the only Costa Rica banks allowed to offer bank accounts to clients were owned by the Costa Rica government. However, in 1948 the banking system was finally opened up to competition and banks and their policies have evolved with the times and technological advances.
Costa Rica’s banking system now consists of the Central Bank of Costa Rica (BCCR), three state-owned banks, a state-owned mortgage bank, four mutual house-building companies, 18 commercial banks, 12 private banks, and 27 savings and loans cooperatives.
All of the banks within the country’s borders are subject to the regulations and policies created by the BCCR. This authority first designs the policies but it is only after the General Supervisory Agency of Finance (SUGEF) approves the policies that they go into effect in both Private and Public banks throughout the country. This means that virtually every bank in Costa Rica will be similar in policies and regulations, however, there are other major differences that should be considered when choosing the bank that works best for you.
Every bank has different fees as well as different types of accounts available, internet services, and credit/debit cards. It’s important to first identify your needs and then research the banks available before making your final decision. Important issues to research are the availability and amount of ATMS in your area as well as whether or not your debit/credit card will be internationally accepted as not all are. Possibly the most important issue to research before choosing your bank is requirements for opening an account. Some may require letters of recommendation from either a personal friend or relative that is currently banking with them as well as letters from your previous banks. They also require a bill of service such as an electric or water bill in your name as well as minimum deposits in order to open an account.
Another issue to consider in choosing your bank is availability of bilingual staff. Most national banks have very few if any employees that are bilingual and the lines tend to be significantly longer in the bank lobbies, even more so for the branches located outside the Central Valley.
To add to the difficulty most banks are only open from 9 a.m. to 3 p.m. Monday through Friday with even shorter hours on Saturdays in certain locations. Luckily banks that have branches located within the local malls operate under extended hours, however, they tend to be more crowded.
Overall the Costa Rican banking system can be easily navigated with a lot of research and a little preparation. Good Luck!
State Owned Banks:
Banco Central de Costa Rica
(Regulates Costa Rican banking policies)
Banco Nacional de Costa Rica
(Established in 1914, the Banco Nacional is the largest state commercial bank and can found in nearly every town, usually with a long line of customers waiting to be attended)
Banco de Costa Rica
(Banco de Costa Rica is considered the most profitable and probably best-run state commercial bank and also has branches throughout the country)
Tel. (506) 2287-9000
Banco Crédito Agrícola de Cartago
(smallest state run bank)
Tel. (506) 2223-8855
(Scotiabank offers a wide range of personal, commercial, retail, corporate, and trade finance services and has branches throughout the country. You will also find English speaking employees at most of their locations)
(BANEX offers customers advanced on-line banking services 24-hours a day, allowing users to easily check and transfer funds over the internet)
Tel. (506) 2257-0522
Banco San José
(This bank is part of the BAC Credomatic Network, comprised of eight banks in Central America, the Caribbean, and Panama, and Credomatic, the largest credit and debit card issuer and processor in the region.)
Tel. (506) 2256-9911
(Cuscatlan is owned by Corporation UBC International, which has operations in El Salvador, Guatemala, Costa Rica, Panama and the United States, by means of family remittances. Corporate shareholders include partners such as the International Finance Corporation)
Tel. (506) 2221-2845
HSBC Costa Rica
(The newest edition to the Costa Rica banking world, HSBC offers a strong international name in a regional context. Also specializes in services for foreign clients)
(Offers a wide range of banking services but relatively few branches throughout the country)
(Established in 1992, branches are available only in the central valley)
|Written by Keyea Caullette|
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Filed under: Business on August 25th, 2008